BIR Ruling [DA-221-98]

June 5, 1998 BIR RULING [DA-221-98] Joaquin Cunanan & Company 14th Floor, Multinational Bancorporation Centre 6805 Ayala Avenue, Makati City Attention: Ms . Tomasa H . Lipana Managing Partner Tax & Corporate Services Gentlemen : This refers to your letter dated June 4, 1997 requesting for a confirmation of your opinion that your client, Great Pacific Life Assurance Corporation (GREPALIFE), is still exempt from expanded withholding tax due to losses incurred for the last two years in accordance with Revenue Regulations No. 6-85, as amended by Revenue Regulations No. 12-94. prcd It is represented that GREPALIFE is a corporation organized and existing under Philippine laws with office address at 221 Sen. Gil Puyat Avenue, Makati City and that as shown in the corporation's income tax return, it suffered net operating losses during the immediately preceding two (2) fiscal years, 1995 and 1996 in the amounts of P3,568,736.00 and P3,810,000.00, respectively. In reply, please be informed that Section 3(d) of Revenue Regulations No. 12-94 amending Revenue Regulations No. 6-85, otherwise known as the "Expanded Withholding Tax Regulations", provides that: "SEC. 3. Section 4 of Revenue Regulations No. 6-85 is hereby amended to read as follows: "SEC. 4. Exemption from Withholding . The withholding of tax prescribed in these regulations shall not apply to income payments in the following cases: xxx xxx xxx (d) In the case of a payee who suffered net operating losses during the immediately preceding two (2) tax years: xxx xxx xxxx Such being the case, since GREPALIFE suffered net operating losses during the immediately preceding two (2) fiscal years, 1995 and 1996, this Office hereby confirms your opinion that it is exempt from creditable expanded withholding tax pursuant to the aforecited Revenue Regulations. (BIR Ruling No. 126-94 dated August 15, 1994) LLpr This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then, this ruling shall be considered null and void. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal & Enforcement Group